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MEDIA RELEASE
24/03/2022 Ref: INV 022

Commission fines two suppliers of medical gases a total of

Rs 3,59 million for having breached the prohibition against collusive
agreements when supplying the Ministry of Health and Wellness
between 2012 and March 2020

Summary
Following an investigation by the Executive Director, the Commissioners of the Competition
Commission have determined that two suppliers of medical gases namely, Gaz Carbonique Ltee
(“GCL”) and Les Gaz Industriels Ltd (“LGI”), have breached the Competition Act 2007 (the “Act”).
The parties’ breach relates to their participation, between 2012 to March 2020, in a collusive
agreement involving the supply of medical gases to the Ministry of Health and Quality of Life (the
“Ministry of Health”).
The Commission found such agreement to be prohibited and void and has imposed financial penalties
on GCL and LGI totaling about Rs 3,59 million.
Between 2012 to March 2020, GCL and LGI were jointly supplying medical gases to the Ministry of
Health through an unincorporated joint venture, referred to as ‘Medical Gases JV’. The Commission
found that the parties’ interactions and joint commercial decision-making relating to their supply of
medical gases, through the JV, to be collusive and involving –
i. fixing of prices at which Medical Gases JV would supply medical gases,
ii. sharing of markets by allocating the different hospitals between themselves, and
iii. restricting the supply of medical gases to the Ministry of Health on two occasions.
The parties to the investigation have collaborated on the matter and, without admitting liability, have
accepted the findings of the Commission and agreed to pay the fines imposed.

Background
Medical gases are critical and life-saving items used in hospital settings. Given their intended use, they
require strict production and supply norms for quality and traceability purposes. Medical gases are
distributed in different forms (gaseous or liquid) and via different distribution channels (bulk and
cylinders).
The Ministry of Health procures its requirements for medical gases, either annually or every two years,
by way of invitation to bid and exceptionally, by direct (emergency) procurement. The needs and
requirements, by the Ministry of Health, of medical gases is meant for the totality of all public hospitals
in Mauritius and Rodrigues and further covers different medical gases, namely oxygen, nitrous oxide,
compressed air, carbon dioxide and nitrogen (in gaseous and liquid format as well as in cylinder and bulk
format). When evaluating bids from participating suppliers, determining factors are price, product
conformity to the Ministry of Health’s bid specifications (e.g., purity certification) and the bidder itself
fulfilling stated specifications (e.g., manufacturing licence, technical capability, experienced workforce).
GCL and LGI respectively manufacture, import, and distribute a range of medical as well as industrial
gases. The parties were individually participating in the Ministry of Health’s medical gases tenders prior
to 2012 and were its main suppliers of medical gases at the time. The parties also commercialise medical
gases to private clinics.

The Investigation

The investigation related to firstly, an allegation of bid rigging between the parties believed to have
been in place between 2009 and 2012 during which the parties had submitted individual bids to the
Ministry of Health. The existence of agreement(s) between GCL and LGI on the price, terms, and
conditions to be submitted by them (cover bidding and bid sharing) in response to the calls for bid was
suspected. This allegation was investigated under section 42 of the Act, which prohibits bid rigging
agreements.
Secondly, the investigation was also concerned with the parties’ subsequent joint supply of medical
gases, between 2012 to March 2020, to the Ministry by way of Medical Gases JV. This part of the
investigation was carried out pursuant to section 41 of the Act which prohibits horizontal collusive
agreements that significantly harm competition, namely agreements to fix selling or purchase prices,
market sharing agreements, and agreements to restrict supply or acquisition of goods or services.
Breaches of sections 41 and 42 are amenable to financial penalties under the Act.
It is to be noted that both parties to the investigation applied for leniency and collaborated with the
Competition Commission. This in turn facilitated the evidence-gathering process during investigation
and helped expedite the completion of the investigation.
On 28 June 2021, the Executive Director completed his investigation and submitted his report to the
Commissioners for their determination.

Main findings and recommendations

The Executive Director’s Main Findings
In respect of the allegation of Horizontal collusive agreement (Section 41):
Medical Gases JV took the form of jointly controlled operations between GCL and LGI as regards the
supply of medical gases to the Ministry of Health. This entailed joint preparation of bids and reaching
a common consensus on prices to be quoted by the JV in bids. Pursuant to their JV agreement, supply
to the Ministry’s hospitals was further allocated between GCL and LGI; with GCL supplying 6 hospitals
and LGI supplying 7 hospitals (including 1 in Rodrigues). The parties’ representatives met periodically
to review the JV’s operations and revenue distribution between GCL and LGI. The investigation was
also concerned with the parties’ decisions taken on two known occasions intending to restrict supply
to the Ministry pending contract award/extension of contract to Medical Gases JV.
Between 2012 and March 2020, Medical Gases JV had participated in 9 medical gas tenders. In 2015,
the parties decided to entrench their collaboration and indefinitely extend the JV’s lifespan.
On the facts before him, the Executive Director found that the agreement between GCL and LGI to set
up Medical Gases JV, in its form and manner and through which they jointly supplied medical gases to
the Ministry, alongside their decision to indefinitely entrench their collaboration was collusive and
prohibited under section 41 of the Act.
The Executive Director further found such agreement to have the objects of price fixing, sharing the
market between the parties for supply of medical gases to the Ministry of Health along geographical
lines, and restricting supply on two known occasions. From the Executive Director’s findings, the JV not
only served to eliminate all actual competition between the parties at the time of the JV’s creation but
effectively deprived the Ministry of the possibility of choosing between the only feasible and alternative
sources of supply at that time and to benefit therefrom.
In respect of the allegation of Bid rigging (Section 42):
The Executive Director did not find information to prove the existence of bid rigging agreements
between GCL and LGI and accordingly, made a finding of no-infringement under section 42 in favour of
the parties.
The Executive Director’s recommendations
In view of the above, the Executive Director recommended that directions be imposed upon both parties
requiring them inter alia to cease their infringements. The Executive Director also recommended the
imposition of reduced financial penalties, after leniency, upon each party. The parties have volunteered
further cooperation during the investigation wherein they decided not to make any access to file
request and not to challenge the findings of investigation, whilst not admitting guilt, in the spirit of
expediting completion of proceedings. Such cooperation was also favourably considered by the
Executive Director, pursuant to CC 6 Guidelines (Remedies and Fines), when making his
recommendations on fines.

Decision of Commissioners
The Commissioners have issued their decision on the matter. In their determination, the Commissioners
have agreed with the findings and recommendations of the Executive Director. The Commissioners have
accordingly directed the parties to put an end to their infringing agreement/conducts.
The Commissioners have, considering the facts and circumstances of the case, the parties’ respective
leniency applications, and the collaboration volunteered by the parties, the Commissioners imposed
reduced financial penalties to the tune of Rs 1,50 million for LGI and Rs 2,09 million for GCL.

The Decision of the Commissioners can be accessed on website of the Commission.

Executive Director’s Statement

The Executive Director, Mr. Deshmuk Kowlessur, highlighted:

“This investigation alongside the Commission’s Decision set the tone for demarcating legitimate
competitor collaborations from anticompetitive ones, irrespective of their form or structure.
Markets stand to gain much from collaborations, including among actual or potential competitors, that
yield lower prices, improved quality, or that bring new products to market faster without tainting the
competitive process. However, competitor collaborations cannot become a façade for collusion. Nor
should they reduce the ability or incentives of the partnering enterprises to compete independently
and/or facilitate a collusive outcome on the market. Such collaborations are harmful to competition
because they adversely affect competitively sensitive variables such as price, output, quality, service,
innovation and/or enable the exchange or disclosure of commercially sensitive information.
The Competition Act should not be perceived as deterring the development of procompetitive or
competitively neutral collaborations, especially as our economy recovers amidst the Covid-19 context.
However, collaborating enterprises must be mindful of the need for effective competition to subsist
between them and on the market and should ensure, at all times, that their collaboration and related
interactions do not fall foul of the Act.”

End of media release